The government has intensified its focus on a hostile £7.4bn bid for one of the UK's largest automotive and aerospace components manufacturers, Worcestershire-based GKN.
Though no official investigation has been launched, City A.M. understands that GKN's chairman Mike Turner has been summoned to a meeting with Alex Chisholm, permanent secretary for the Department for Business, Energy and Industrial Strategy (Beis).
Read more: GKN rejects Melrose's hostile £7.4bn bid
Last week it was revealed that both GKN and Melrose, its turnaround firm suitor, had met with business secretary Greg Clark amid government concerns over national security. GKN's aerospace branch is heavily involved in defence projects, including the manufacture of parts for the UK's F-35 stealth fighter and the US's new main B-21 bomber, and the government can intervene in deals which raise public interest concerns surrounding national security, financial stability or media plurality.
Melrose is currently the only bidder to have made a firm offer for FTSE 100-listed GKN, though others including private equity house Carlyle are understood to be keeping a close eye on developments.
Melrose has a history of turning around struggling industrial companies like GKN and selling them on for a massive profit. It wants to merge GKN with its own existin business, and is due to publish its formal offer document between the 1st and 14th February which could include a sweetened proposal.
GKN's shareholders have currently been offered a cash-and-paper offer, which would give them a 57 per cent stake in the newly combined business and 81p per share of cash in hand.
GKN itself is throwing up its defences against the hostile bid, urging shareholders to put their faith in its plan to separate the automotive and aerospace branches into two separate businesses.
A government spokesperson has said it is "closely monitoring" the situation.